Prime Minister David Cameron will endorse the plans which will see savers rewarded for investing in schemes that will help teenage mums, children from workless families and young criminals improve the quality of their lives.

The increase in ISA limit will be designed to make the schemes more attractive to potential savers looking at the early intervention ISAs.

Child Trust Fund replacement, the Junior ISA could also feature in the plan, with young savers encouraged to invest their money in schemes that help people of a similar age to them.

Labour MP for Nottingham North, Graham Allen has written up the plans, which were commissioned by David Cameron who added, ‘We need to change the culture of Whitehall firefighting with billions  of pounds of public money and shift to a culture of early intervention.’

The report, which is titled, Early Intervention: Smart Investment,  Massive Savings , is also set to offer financial incentives to firms who are able to steer children away from a life of alcohol abuse and crime.

Private firms who are able to prevent children from falling into the wrong crowds and following the wrong paths will benefit from a system of payments for their work.

The scheme will be funded by wealthy investors who will be offered ‘early intervention bonds’ which are designed to pay for the plans, and it is hoped that they will be able to raise £200million this way.

Cameron added that it makes sense for ‘the economic, fiscal  and moral case for switching public spending with dealing with the causes of  social failure towards investing in programmes that prevent the failure in the  first place.’

A child with untreated behavioural problems can cost the taxpayer £70,000 on average by the time they are 28, ten times the cost of children without problems.

Children in a young offenders institution cost the taxpayer around £60,000 a year, and a secure children’s home costs £220,000.

Citigroup claim the certificates are drawing deposits away from banks and are unnecessarily expensive.

The investment bank also claimed that the new certificates are a “bad idea” and claim the method of raising money is an expensive one because of the higher yield than guilds, and the fact the interest is paid tax free.

The group’s analysts also criticised the Governments expansion of the NS&I claiming that they should actually look to raise funds through the sale of gilts and reduce the size of the scheme.

Citigroup explained, “While the new national savings index-linked certificates appear highly popular with many investors, we believe they are a bad idea for the government: they are likely to prove a highly expensive form of funding and will hinder the important task of reducing the UK banking sector’s reliance on wholesale funding.”

NS&Is saving certificates have been recommended over some ISAs as they pay a rate of interest 0.5% over the rate of inflation over 5 years, with inflation expected to be an average of 3.6% over the next five years, the annual yield will be around 4%. In comparison a conventional gilt offers a yield of 2.2%.

The high yield is very expensive for the government, and also makes it more difficult for banks to attract retail deposits, despite the fact they are trying to pay off the government and get out of their state backed situation.

It is thought that NS&I certificates will raise around £2billion this year, against the larger £1trillion UK retail deposits are thought to bring in, although the slow growth of the deposits is being put down to the certificates.

Net ISA sales were recorded by the IMA at £2.4billion, well above the £1.8billion monthly average for the past 12 months, showing savers were saving.

ISA sales accounted for nearly 4 in 10 of all sales made through platforms, which was the highest proportion of total sales ever recorded.

Funds under management for fund platforms were recorded at £112 billion for April in 2011, again a record high.

Also a record high were net sales made through fund platforms, recorded at £1.3billion.

The leading asset class in the IMAs fund statistics fro April was equities with net retail sales of £1.1billion, which the IMA explained was the sixth month in a row that equities has been the leading class asset.

They added that is was the second time in twelve months that sales of equities had surpassed the £1billion mark.

The second highest selling asset class were bonds for April, at £516million which was a little above the £497million average for the past year.

Chief executive for the IMA, Richard Saunders added, “April’s statistics reflect a strong 2011 Isa season, with Isas accounting for about half the £2.4bn investors added to their holdings.

“Fund platforms reported their highest gross Isa sales on record in April, at £1.3bn.

“Equity funds remained the top choice for retail investors, with April’s sales surpassing the £1bn mark for the second time in the past twelve months.

“Investors continue to favour strategic bond funds. For the fourth month running, the strategic bond sector was the best selling IMA sector in April, accounting for 39% of gross bond sales.”

The Building Societies Association (BSA) released figures that showed the value of money paid into cash ISA savings accounts in April was £1.37billion, well up on the £668million paid into the accounts in April 2010.

Figures relating to all savings accounts showed that Britain was starting to save again, as net receipts, figures which take into account both deposits and withdrawals, were up to £983 million this April, compared to £537 million in April of last year.

Chief executive officer of Skipton Building Society, David Cutter explained last month that his society had increased branch distribution in the last year, adding “We have 22 more outlets. That is a combination of the merger with the Scarborough in March 2009 and the Chesham in June 2010.”

“We opened 13 branches in late 2010, which were former Halifax agencies located in some of our Connells estate agency branches. Halifax withdrew from that market, so we stepped in and put in place 13 additional branches.”

Mr Cutter added that he felt his societies investment in retail distribution was starting to payoff, and he added that online business was starting to grow.

“The online presence that we have got is a modest part of the business and we intend to grow it gradually, because if you grow it too fast, you attract very price sensitive customers.”

“We are predominantly branch based, but there is a greater preponderance of Internet customers who are quite local to our branches.”

“We launched a telephone saver account last year and, on the online, we introduced a My Savings product.”

Cutter also explained that he could see next year becoming more challenging with the introduction of the NS&I bonds.

“Mutuals had a significant inflow of funds into savings accounts during April which was helped by particularly strong deposits into ISA accounts compared to April last year.,” he added.

“However, it will be difficult for deposit takers to maintain a positive inflow of funds this year given the squeeze on household finances. The added competition from state-backed NS&I could also make attracting funds more challenging.”

Every single year in the UK around 32,000 life insurance claims are made by families who have lost someone, and the average waiting time for a claim is as long as four months, often too long for a families delicate finances.

New guidelines introduced by the Association of British Insurers (ABI) will see claims turned around in just four weeks, four times faster than before.

The ABI worked in association with the Law Commission to create a solution which will bypass the lengthily legal process involved in winding up an estate once someone has passed away.

The new process will see the claimant sign a declaration agreeing to return any money that that have received should the legal process decide that they should not have been given it in the first place.

The claimant will also need to provide evidence to the insurance company that they are the rightful recipient, evidence that will later be reviewed by the legal teams dealing with the process.

The ABIs director general, Otto Thoresen explained, “Dealing with bereavement is hard enough, without the added stress of worrying about money.”

“This new life insurance claims process means the time it takes on average to receive a payout will drop from four months to just four weeks.

“We believe that this will go some way to alleviating financial hardship for a deceased person’s dependents, especially families on lower incomes who have few other assets available to rely on.”

Life insurance is often taking out by someone who wants to make sure their partner, spouse or family will be looked after financially should they die and no longer be able to provide for them.

The lump sum paid often provides a lifeline, and can pay off a mortgage, as well as providing money at a difficult time, especially if savings are unavailable, while the family get back on their feet and readjust their finances accordingly.

Many couples take out a joint life insurance policy when they buy a house together so that if one half of the couple does die, the house will often by paid for by the policy, not leaving the other one unable to afford the mortgage repayments.

Nationwide claims the new savings bonds provide unfair competition for banks and building societies, who feel unable to match the interest rates on offer.

Chief executive of Nationwide, Graham Beale ironically used the same announcement that nationwide had increased their underlying annual profit by 30% to attack the 5 year index linked NS&I certificate, claiming it offered tax breaks that private-sector rivals were unable to match.

Beale hit out, saying, “It is unfair that NS&I are operating with these advantages that we cannot replicate in any way. Why does government want to take funding out of the system when the market is so subdued?”.

New NS&I certificates have been back on sale since May, and are intended for savers who believe that inflation rates will stay high for the next five years and want to protect their savings from that inflation.

The product allows consumers to invest up to £15,000 and will pay interest at a rate a little over the rate of inflation. The offer is better than the rate offered by many ISAs, and with inflation currently at 4.5%, this seems an attractive proposition, and would only become less attractive if inflation drops right back.

Nationwide are currently the UKs largest building society and Beale revealed that his company had been looking to see of the was sufficient space in the market for them to launch a similar product, although theirs would not be able to offer the same tax breaks for higher rate taxpayers the government back product can.

Beale also predicted that the Bank of England base rate would increase from it’s current 0.5% position by the end of the year, and would continue to rise to around 2.5% by the end of 2013.

An increase in the interest rate would make lending more profitable for the building society who made a £317million pre tax profit for the year, although this was down on their £341million profit the previous year.

Baroness Stowell has accused certain banks of offering better interest rates on taxable savings accounts than on the non taxable cash ISAs. Whilst many customers are essentially receiving a better rate in the ISA because they lose some of the interest in the taxable accounts to the taxman, she is concerned that the bank are pocketing some of the tax savings on the ISA accounts.

She argued, “Cash Isas are a great incentive for us all to save. We benefit, and so do the banks: last year 15 million of us held £172bn in cash Isas. But only customers, not banks, are supposed to benefit from the Isa tax relief. The assumption we have to make is that some of the banks are taking advantage of people who are doing the right thing.”

Northern Rock, state owned, are one of the banks accused in the report, as they offer a 3.5% three year fixed rate taxable bond, but only a 3.4% fixed rate cash ISA.

A spokesperson for the bank said, “There are many different factors taken into account when setting the interest rate a given product will pay, and Northern Rock has an extremely strong savings range with competitive rates.

“It is incorrect to suggest that we uniformly pay more on taxable fixed-rate bonds than equivalent fixed-rate Isas – for example, our current one-year fixed-rate bond pays 2.85% while our one-year fixed-rate Isa pays 3%, and our one-year E-Bond pays 3%, while the one-year fixed-rate Isa pays 3.1%.”

Nationwide on the other hand have a policy of paying the same level of interest on their tax free and taxable products. Savings and Investment director for the bank, Robin Bailey said, “We have taken the view that there is no logic in pricing differently because customers are committing for the same length of time. But some [banks] do pay a slightly lower interest rate on fixed-rate cash Isas [compared to bonds of the same duration] in the knowledge that the Isa customer is tax advantaged, so it’s still a better deal for them.”

Saga also pay 4.2% on their taxable three year fixed bond, but just 4% on their three year fixed rate ISA prompting Prashant Vaze from Consumer Focus to support Stowells report.

Vaze said, “‘It is clearly unacceptable that cash Isas are treated as cash cows by banks who set lower interest rates, effectively shaving off some of the tax relief for themselves.

“We fully agree that cash Isas should offer pre-tax interest rates at least as good as savings bonds or other long-term savings products offered by the same bank.”

Richard Gnodde will join the unit as their third co-head in a move which is seen as an attempt by the company to step up their presence outside of America.

Investment banking is no longer Goldman Sachs biggest earning division, but the company is refusing to drop it completely, and still see’s it as vital to maintaining their position.

Also joining the team are Yoel Zaoui, head of European investment banking, and Gene Sykes from Los Angeles, as global co-heads of M&A. Leaving are Gordon Dyal and Christopher Cole.

Chief executive of Goldman Sachs, Lloyd Blankfein joined president Gary Cohn in writing a note to all the other employees explaining,  “These important changes reflect the continued importance and growth of the firm’s global client franchise and the contributions that both Richard and Gordon have made to the firm and the investment banking division.”

The bank has been making changes frequently in the past few months. In March Michael Sherwood succeeded Mr Cohn as chairman of their partnership committee, and in January Michael Evans moves from being their Asia chairman to head of emerging markets.

Goldman Sachs are making the changes after a business standards survey which revealed that the banks senior management were worried that the backlash after the economic crisis has hurt the companies standing with corporate customers around the world.

“Clients raised concerns about whether the firm has remained true to its traditional values … given the changes to the firm’s size, business mix and perceptions about the role of proprietary trading. Clients said that in some circumstances, the firm weighs its interests and short-term incentives too heavily.”

Looking for advice on your personal finances? do you have a pension? perhaps savings? all can be reviewed by our specialists, contact us today on 0800 678 5929.

UK pensioners are increasingly being forced to draw on their savings, as the rising cost of living has cut their pension income by over £700 a year in the last 2 years.

New research by Age UK is based on a new inflation measure, dubbed the ‘Silver Retail Price Index’ or Silver RPI, which shows that pension income is particularly badly hit by the ongoing rises in inflation, as pension incomes tend to be spent on those basic goods most affected.

The implication for younger pension savers is that forward thinking, good pension advice, and retirement planning is now needed, to ensure that pension funds are well invested to provide the best possible returns on retirement.

Ordinary savers also affected

Ordinary savers in the UK are also under pressure, with the average household now needing an additional £1,100 to maintain the same standard of living they had two years ago.

Figures from Sainsbury’s Finance showed that inflation has cut deep into the resources of Londoners in particular, who now would need to find an extra £1,342 a year to restore their standard of living to 2008 levels, while in other parts of the UK the typical figure would be around £951 (the figure for the North-East).

Consumer price inflation in October was 3.2%, according to the Office for National Statistics, driven largely by rises in fuel costs.

Consumers seeking ways to minimise the impact of inflation on their income can seek independent financial advice on tax-advantaged savings options, such as ISAs, from their independent financial adviser.

The average person had just £1,771 in savings in the period from July to September, down by £279 on Spring figures, according to the latest ING Consumer Savings Monitor.

This is the savings equivalent to just 40 days’ pay in accessible cash, at a time when it takes an average of 6 months to get back into work, if you lose your job, according to ING.

Young people in the 16 to 24 age group were even more vulnerable, with less than  a week’s pay – just £348 – in reserve, ING said.

While over a third of people (38%) used their savings to pay household bills, 31% spent part of their savings on a holiday, and 11% of people used their reserves to pay the usual back-to-school expenses for the children.

The situation reflects the first chill of the government pay freeze, with many families dipping into their savings accounts to adapt to a period of rising prices, but static incomes.

The average citizen is currently far from planning monthly savings or new investments, according to ING.

Many families are still struggling to pay down debt and personal loans accrued during the recession. Unsecured debt (i.e. credit cards, store cards, and overdrafts) fell by an average of £57 during the summer, with 18% of people having to tap into their savings accounts to cover their bills.

Looking forward, 35% of people now expect to put part or all of their usual saving on hold, as general government cutbacks take hold, Christmas moves into view, and the spectre of VAT increases in 2011 looms large on the horizon.

*All figures from the quarterly ING Consumer Savings Monitor